Help me with savings for my child

POSTED BY David Pepper ON April 25, 2013 11:54 pm COMMENTS (4)

I am 31 year old nale and have a 3 months old baby boy. My wife is not working so I have her and my baby as dependents. My monthly salary is 55k and my monthly EMI for my house is 16k which will go on for next 5 years (loan amount 10lacs). Besides that my monthly expenditure is 25K. I have two monthly SIPs which I have started recently of 2k each in HDFC top 200 and Reliance equity opportunity growth. I have a traditional LIC policiy of which annual premium is 10 k and similar insurance policy for my wife from ING life. I have two ULIPs from reliance for which I have stopped paying premiums after 3 years lock in period. I have to surrender that policy as I have not vbeen able to recover even the principal amount. Now I have following questions:

1. Are the two SIPs good enough? I want to start investing another 3000 every month in SIP. Should I increase the amount in the exsiting two (HDFC top 200 and reliance equity opportunity Rs.2000/month each) or should I take another fund?

2. I want to take a term plan as suggested by jagoinvestor. I am confused which one to opt for? Is Aviva good enough or should I split between LIC Jeevan amulya 1 and Aviva? 

3. I want to save for my baby’s future. I have 1.5 lacs in my baby’s account. To start with I am thinking of putting 50k in PPF and remaining 1 lac in FD (9.25 interest rate for 7.7 years) Is that a good move? I want to then start SIP as I mentioned above for him. As my salary increases I will increase the monthly amount I put in SIP for my son. Is there any other aspect I should be focussing on?

4. I should start planning for my retirement also. Is it a good idea to start a SIP for that or any other suggestion? I do keep putting ample money in my PPF (current balance is around 8 lacs)

5.  Should I surrender my old LIC policy and my wife’s ING life policy for which annual premium is 10 K for each?

6. I have enought liquidity for emergencies.

7. I have medical coverage from my company. Should I take another one for myself?

Any help/suggestion will be highly appreciated!! Many thanks in advance.

4 replies on this article “Help me with savings for my child”

  1. Dear David, offline services from me? Actually it’s opposite. I’m offering online & you need offline. Am i correct? 🙂

    Regarding the situation & the queries posted by you, as you are already visiting this forum for almost a Year, you should have general idea on how to go ahead from here on wards. yes dear Ashish has helped it for you. Still if you want to discuss, please confirm which part of your original query, you want to discuss & we can go on for it.

    Regarding the paid services – Why are you not opting a planner from your city?



  2. David Pepper says:

    Hi Ashal,
    Thanks for your response. I have been visiting this site over more than a year now. Hence I have learnt that taking a term plan is a must and also the importance of SIP’s. I did think of taking help of your paid service but I gather that they are offlne I would have preferred having someone who could help me in person.

    Hi Ashish,
    Thank you very much for taking out the time to respond. Your response makes a lot of sense.
    P.S. The insurance for my wife was taken when she was working.

  3. Ashish says:

    Dear David,

    If would have been in your place, I would have looked at following, mind you this is not an advice and just my view

    1. Looked at the performance of these two funds as to how they are performing and what is their portfolio. If the performance is fine and portfolio is not overlapping, would have continued with these funds and added additional money in these funds only, otherwise moved to another funds.

    2. Yes, taken a term plan and from a company I would feel comfortable. Aviva in my view is not bad either. By the way, when your wife is not earning, why do you need insurance for her? In general we take insurance to cover ourselves from any financial loss and not as a tool to make money for someone’s death.

    3. Would have calculated how much of 80C benefit I can use in PPF for a particular year put that PPF. For example if I have invested 65000 in tax saving investment using other tools, would have put 35K in PPF for first year and rest in FD for 1 year. Next year again residual amount in PPF till I put all of 1.5L in PPF. This way I would used 80C full benefit without putting money here and there unnecessarily. Just a thinking from my side. Otherwise put 1 L in PFF in first year and 50K in FD and next year move 50K+interest in PPF.

    4. For retirement, need to calculate how much amount you need and therefore how much to invest. But SIP can be in same funds as for the point 1. Why to go for different funds, if the one you have are performing better.

    5. If surrender was better than paid than would have gone for it, otherwise would have made them paid up.

    6. Emergency fund may also be invested in such a way that it can be taken out immediately in case of emergency and also keep on generating some return.

    7. Why only for yourself and not for the complete family via a family floater plan.


  4. Dear David, before investing your money, invest your time to read prev. posts similar to you. if you do not have time, spend some money & take help of paid financial planner. Please opt ‘FEE ONLY’ planner & not the ‘fee based’.



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